BRRRR cash out refi - higher interest rate to get 80% LTV instead of 75%?

[Inga Davis]

Hello all,

I bought my first rental property in Columbus OH using the BRRRR method and money from my HELOC on my primary residence. I am now trying todo a cash out refinance to pay off my HELOC so I can repeat the process. I could get all my money back out (except closing costs) if I did a 80%LTV, however that would be at a 9% interest rate unless I decide to buy down the rate. I would still be positive cash flowing, but just barely. My other option would be to do a 75% LTV at 7.5% interest, but I would have to come up with $20,000 to pay off my HELOC or carry the balance on my HELOC and pay interest on that as well. My goal is to keep this property long term, refinance in maybe 3 years when interest rates have hopefully come down and my property has also increased in value.

Thank you for your help! - Inga